Go First CEO confirms owner and government support after bankruptcy filing in India.

Go Airlines Files for Bankruptcy

By Tanvi Mehta, Dhanya Skariachan and Chris Thomas

Go Airlines (India) has filed for bankruptcy, blaming Pratt & Whitney engines for the grounding of about half of its fleet. Despite this setback, the airline’s owner, the Wadia group, has no plans to exit the company. CEO Kaushik Khona stated that the group has always tried to keep the airline operations going on a normal basis, despite being disabled to that extent by Pratt & Whitney.

Go Airlines argued in an arbitration case that Pratt & Whitney engines had a “serious design flaw” that caused engine shutdowns and premature failure. As of this week, 28 of its aircraft were grounded. Pratt & Whitney, however, said that Go Airlines could not show that it was the “sole or exclusive cause – or any cause at all – of its poor financial condition”.

What’s Next for Go Airlines?

• The insolvency proceedings were aimed at reviving the airline and not selling it, Khona told Reuters, confirming it had made all required payments to Pratt & Whitney.
• Go First, which had an almost 10% share of the Indian market in winter 2021, saw that fall to 7% in October 2022. By March, its weekly departures were at 1,390, down 39% from 2021 levels.
• The airline owed financial creditors 65.21 billion Indian rupees ($797 million), its bankruptcy filing showed. As of April 30, Go First had not defaulted on any of those loans, it said in the filing seen by Reuters.
• On Wednesday, the airline’s CEO said it was looking to dissuade lessors from taking action and confirmed some parties had expressed interest in taking a stake in the airline.
• Go First’s lenders will most likely meet on Wednesday to discuss what to do next after the bankruptcy filing on Tuesday, two bankers aware of the development told Reuters.

Go First’s bankruptcy could be a boon for its rivals. “If the suspension is prolonged, other airlines that are adding capacity would look to avail the slots vacated by Go First and grab onto the market share,” Jefferies analyst Prateek Kumar said in a client note.

The Indian government is very keen to see that Go First does not fail, according to Khona. An Indian court is expected to take up Go First’s insolvency matter on May 4.